Growth of bank credit slips to 10.2%, deposits rise faster at 11.62%
19 March 2015
Bank credit grew at a slower pace of 10.19 per cent during the fortnight ended 6 March 2015 while deposits continued to grow at a faster pace of 11.62 per cent during the period, figures released by the Reserve Bank of India (RBI) showed.
Loan growth has been muted for most banks this year since the economy is yet to pick up.
Offtake of non-food credit from commercial banks grew at a slower pace of 10.19 per cent to Rs65,24,257 crore during the fortnight ended 6 March 2015, preliminary data released by the RBI showed.
Banks deposits, on the other hand, continue to outpace credit growth, rising 11.62 per cent to Rs85,54,045 crore in the period, against Rs76,63,535 crore in the same period last year.
Total advances of banks had stood at Rs59,20,762 crore during the corresponding period of the previous year.
Advances of banks had stood at Rs59,20,762 crore during the corresponding period of last year.
Most banks have seen muted loan growth this year since the economy is yet to pick up. The country's largest lender State Bank of India registered an even slower credit growth at 10 per cent during the current fiscal.
''One of the reasons for muted credit growth is that corporates are raising funds from the commercial paper market where rates are lower than base rate,'' ICRA analyst Vibha Batra said. ''We expect a muted credit growth for this year, in the range of 12-13%, but more towards the lower end of the range,'' she said.
According to ICRA, deposit growth is likely to be in the range 11.5 per cent to 13 per cent in FY15. Demand deposits grew 14.13 per cent to Rs7,97,101 crore, as against Rs6,98,356 crore in the year-ago period, while time deposits rose 11.36 per cent at Rs77,56,941 crore from Rs69,65,179 crore.
In the quarter ended December, bank credit slowed to 10.1 per cent, against 14.2 per cent growth recorded in the year-ago period. Deposits grew 10.9 per cent in the third quarter, which was slower than 15.4 per cent growth recorded in the year-ago quarter.